As Paramount and Oracle vault into corporate America's biggest borrowers, their shared link to billionaire Larry Ellison is stirring angst on Wall Street. Investors assumed Ellison would support Paramount if it faced financial trouble after the company took on $52 billion of additional debt to acquire Warner Bros. Discovery. However, with much of the Ellison family's wealth tied to Oracle shares during its own capital-intensive AI buildout, concerns are rising that the value of that safety net could come under pressure precisely when Paramount needs it most.
Market concerns are already reflected in trading. The cost to insure the debt of both companies against default has converged and is moving in lock-step, signaling investors are beginning to treat the two credits as intertwined. "You have to consider your total Larry Ellison risk," said portfolio manager Campe Goodman of Wellington Management Co., adding that investors should regard Oracle and Paramount as related bets rather than separate credits.
Just a year ago, Ellison's shares soared to a record, briefly making him the world's richest person. Since then, his fortune has plummeted by almost $200 billion — more than any other person globally. Though he remains worth roughly $192 billion, enough to place him among the 10 richest people, the sharp reversal shows how drastically his fortune can gyrate based on Oracle's stock price. Last month, Ellison canceled a plan to sell billions in stock and disclosed he had increased shares pledged as collateral for personal loans. With Paramount's financing package wrapped up Wednesday, including $30 billion of investment-grade bonds and $12.4 billion of junk bonds, the market continues to watch how Ellison's ability to follow through on capital pledges will impact debtholders.
Источник: Bloomberg Markets · Сводку подготовил HeadlinesBriefing